spotlight

Nitin Vats

General Manager

This month, we would like to shine a spotlight on a few more members of our Green Mortgage team! Without each and every person, our team wouldn’t be as wonderful, and we wouldn’t offer you all that we do. While many of you know Kyle as the face of Green Mortgage, there’s a big team behind him all working incredibly hard, and they’re the reason why GM is in the top 0.1% of Canadian brokerages.

Nitin Vats is the General Manager of Green Mortgage, leading our top-notch sales team to success with his coaching and guidance. He has experience in business development, customer satisfaction, and expansion strategies that have developed our retail, residential, and commercial businesses.

Before joining us here at Green Mortgage, Nitin worked in the finance industry since the mid–2000’s holding various management positions with reputable lenders. Before that, he even managed Guest Relations at Dubai’s luxurious Burj Al Arab Hotel, where he improved efficiency and increased profits for the numerous departments he worked with. When not spending quality time with his family, you can find Nitin traveling worldwide— embracing life and inspiring everyone he meets. His enthusiasm is contagious, and his determination to strive for the best is an inspiration!

Chris Clark, a UBC Sauder graduate, with a specilization in accouting, has joined Green Mortgage as our Business Analyst. His knowledge of problemsolving and finance background makes him invaluable when finding solutions to complex issues. He is passionate about learning different parts of the business and takes great care when analyzing the market.

Chris loves exploring new ideas and initiatives that can help drive better outcomes for himself and the company. Chris is a whiz at data–driven decisions. His knack for spotting patterns and making informed choices is truly impressive.

Chris Clark

Business Analyst

WHAT IS A SHORT–TERM RENTAL PROPERTY, AND IS IT A GOOD INVESTMENT?

A short–term rental property is an attractive investment opportunity that can generate consistent income and provide excellent returns. Unlike traditional long–term rentals, short–term rentals are rented out on a nightly or weekly basis, allowing investors to capitalize on the transient nature of travel and tourism.

Investing in a short–term rental comes with its own challenges but offers excellent potential for those looking for an alternative form of real estate investing.

What Is a Short–Term Rental Property? A short–term rental property is a type of real estate investment leased to guests for a short period, typically a few days to a few weeks. Short–term rentals are often furnished with cooking utensils, linens, cable, and internet service, making them perfect for travelers and vacationers.

Examples of short–term rental properties include vacation homes, apartments, lane–way homes, and even individual rooms within a property. The property is managed by the owner or a property management company, and guests book and pay for their stays through online platforms or directly with the property owner.

Why Should I Buy a Short–Term Rental Property as an Investment? 1. High potential for profitability: Short–term rentals typically have higher nightly rates and occupancy rates than long–term rentals, which can be very lucrative. 30–day or more furnished rentals work with most strata companies and are perfect for people traveling for work or who have been put up by their insurance company because of a fire or flood.

2. Flexibility in property management: With a short–term rental, you can manage the property yourself or hire a professional property management company to handle bookings and guest relations. This allows you to tailor the management style to your preferences and goals. 3. Diversification of investment portfolio: Adding a short–term rental property to your investment portfolio can help diversify your income streams and reduce the risk of relying on a single source of income. 4. Location-based revenue: Short–term rental properties are often located in popular tourist destinations or urban centers, where demand for vacation rentals is high. This can lead to consistent income throughout the year. 5. Opportunity for personal use: If you purchase a short–term rental property in a location you enjoy visiting, you may be able to use the property for personal vacations when it is not being rented out. This can provide additional value and enjoyment from the investment. 6. Increase in property value: Depending on where you are buying, when the value of the property increases, so does your equity.

How Do I find a Profitable Short-Term Rental Property? To find a profitable short–term rental property, consider the following factors: 1. Location: Short-term rental properties are often located in popular tourist destinations or urban centers, where demand for vacation rentals is high. Look for properties in areas with a high concentration of tourist attractions, restaurants, and other amenities that will attract guests. 2. Property type and size: Different property types and sizes appeal to different types of travelers, so consider the kind of guests you are trying to attract when choosing a property. For example, a small studio or one-bedroom apartment may be suitable for solo travelers or couples.

A larger home or vacation rental may be more appealing to families or groups of friends. 3. Amenities: Short-term rental properties should be equipped with the amenities that travelers are looking for, such as a fully equipped kitchen, comfortable beds and linens, and high-speed internet. Consider the type of amenities guests likely value in your area and ensure that the property you are considering has these features. 4. Price: The property’s price should be competitive with similar properties in the area. Research the local rental market and compare the cost of the property you are considering with similar properties to ensure that it is priced appropriately. 5. Property management: Consider whether you will manage the property yourself or hire a professional property management company. A property management company can handle bookings and guest relations, freeing up your time and allowing you to focus on other aspects of your investment. 6. Talk to a Realtor: Realtors are experts at finding these types of properties because of their popularity and how lucrative they are. They will have all the statistics and comparables you need to find the best available property.

What Are all the Expenses of Owning a Short–Term Rental Property Owning a short–term rental property can be a profitable investment. Still, it is essential to understand all the expenses involved to make informed decisions about the property. Some of the costs associated with owning a short-term rental property include the following: Purchase price The initial purchase price of the property is the most significant expense associated with owning a short–term rental. This cost will vary depending on the property type, size, location, and other factors.

Closing costs In addition to the purchase price, several closing costs are associated with buying a property, such as attorney fees, title insurance, and transfer taxes. These costs can add up, so it is important to factor them into your budget when purchasing a property. Financing costs If you are financing the purchase of the property with a mortgage, you will need to pay interest and other fees associated with the loan. This can add to the overall cost of owning the property, so it is important to consider the terms of the loan and the impact on your cash flow.

Property taxes As a property owner, you will be responsible for paying property taxes. The taxes will depend on the property’s value and the area’s tax rate.

Insurance Short–term rental properties typically require insurance to protect against damage, theft, and other risks. The insurance cost will depend on the type of property and the coverage you choose. Maintenance and repairs Regular maintenance and repairs are necessary to keep the property in good condition and attractive to guests. These costs can include cleaning, landscaping, and repairs to appliances and other equipment. Put aside up to 10% of revenue to cover these costs.

Utilities As the property owner, you will be responsible for paying the utility bills for the property, including electricity, water, and gas. The cost of utilities can vary depending on the season and the property usage.

Property management or listing fees If you choose to hire a property management company to handle bookings and guest interactions, there will be a cost associated with their services. The price of property management can vary depending on the services offered and the size of the property. If you are going to be your property manager, there will be listing fees on all the rental sites. These fees differ depending on the platform you are using, but they range between 3%–5%

Owning a short–term rental property involves several expenses that should be considered when making an investment decision. By understanding the costs associated with the property, you can make informed decisions about the profitability of the investment and plan for the

necessary expenses.

What Are the Pros and Cons of Owning a Short–Term Rental Property? Owning a short–term rental property can be a great way to make extra income. But it’s not without its drawbacks. Here are some of the common pros and cons of owning an Short–Term Rental (STR).

The Pros: 1. Potential for High Profits—One of the most significant advantages of owning a short–term rental property is the potential for high profits. You could generate more than double what you would from traditional long–term rentals due to the higher rates charged for shorter stays. 2. Tax Benefits—Another significant benefit to owning a short-term rental property is the tax benefits it. Depending on where you live, you may qualify for deductions that can help reduce your tax bill. 3. Flexible Schedule—Short–term rentals don’t require the same longterm commitment as traditional rentals. This means that you have more flexibility to choose when and how often to rent out your property and can even use it yourself if you want to. The Cons: 1. High Maintenance Costs—One of the main drawbacks to owning a short-term rental property is the higher maintenance costs associated with maintaining the property in top condition for guests. Since guests stay for shorter periods, regular cleaning and repairs will be necessary to keep your property looking great and to ensure that guests are happy. 2. Increased Competition—The increasing popularity of short-term rentals means more competition in the market than ever before, making it more challenging to get your property noticed and booked. You’ll need to find ways to differentiate yourself from other properties to stand out. 3. Risk of Damage—Short-term renters can sometimes be less responsible with the property than long-term tenants, meaning you may end up dealing more damage or repairs than anticipated. It’s important to have a reliable system for collecting security deposits and enforcing rules with your guests to minimize any potential risk of damage or loss of income.

What You Need to Know Overall, owning a short–term rental property can be a great way to make money and is worth considering if you’re looking for an additional source of income. However, to determine whether short–term rentals are a worthwhile investment for you, you must consider both their advantages and disadvantages.

WHAT ARE MEDIUM–TERM AND LONG–TERM RENTALS ARE THEY GOOD INVESTMENTS?

Medium–term and long-term rentals can be lucrative real estate investments. Medium-term rentals are typically leased out for 6 to 12 months, while long–term rentals are often rented out for a year or more. These types of investments offer many advantages over other real estate investment options, including higher returns on investment, more consistent cash flow, and the potential to build equity with appreciation. By carefully selecting properties in desirable areas and managing them well, investors can enjoy significant profits from their medium–term and long–term rental investments. Investing in medium–term and long–term rental properties is an attractive option for those looking for steady income, capital growth, tax benefits, and security of ownership. With careful research and planning, investors can maximize their returns and minimize the risks associated with this type of real estate investment.

Medium Term Rentals (MTR) Medium Term Rentals (MTR, also known as Executive Rentals) are stays typically measured in months and meant for people who require a semi–permanent arrangement. Examples include temporary work assignments, extended vacations, insurance claims, or waiting for a new house to be built. Generally, the guest will have another address where they receive mail, but this may only sometimes be true (i.e., when waiting for a home to be rebuilt after a natural disaster).

When it comes to MTRs, there often needs to be a clearcut answer regarding laws governing them; typically, operators interpret them as either short–term or long-term rentals. This has important implications: if an operator chooses to abide by most STR laws but not to collect HST, the tenant could challenge the Landlord Tenant Board and argue that they are a long–term tenant subject to the protections of the Residential Tenancies Act. Owners of MTRs need to be aware of all laws governing their rental type.

Pros and Cons of Owning a Medium–Term Rental Medium–term rentals are another great way to rent out your investment property. Here are some pros and cons that we have come across:

Pros: • Higher rental fees than regular short-term rentals due to longer occupancy times.

• Less wear and tear on the property from frequent guests.

• More flexibility regarding how long each guest stays since the agreement is for a period rather than a onenight stay.

• 30+ day rentals are less hassle for you because you will only need to fill the unit a few times per year compared to several times per year with an STR.

Cons: • More paperwork is involved in setting up an MTR, with more detailed contracts and background checks required at setup time. • Potential legal issues if the tenant challenges you that they should be considered an LTR.

• Lots of competition, so you need to ensure that your price point is competitive. • Longer turnaround times between tenants, resulting in vacancy periods, which may reduce income.

Medium–term rentals (MTRs) offer an attractive opportunity to both tenants and landlords. With higher rental rates than short-term rentals and less wear and tear on the property from frequent guests, MTRs can be a lucrative option for owners. However, they also require more paperwork and greater legal awareness when setting up contracts and interpreting laws applicable to them. If you’re considering giving MTRs a try, make sure you understand your responsibilities as a landlord to maximize your profits while providing quality accommodations for your tenants!

Long–Term Rentals (LTR) Managing a long–term accommodation business is no small feat and involves abiding by more than just the Residential Tenancies Act. Local zoning laws, municipal bylaws, business licensing requirements, taxation rules, health, and safety regulations, building code standards, and fire code compliance are all aspects that must be considered to keep tenants safe and protect the owner’s investment.

When purchasing a building with additional units beyond what’s allowed by zoning laws, it is important to get a compliance report from the municipality so as not to face penalties, including the destruction of any illegal unit. Similarly, when dealing with non–conforming units, one must remember that they were usually present before current zoning by–laws. To ensure the property meets ongoing obligations and maintenance, it’s important to ensure that central fire systems are maintained as per regulations which may include annual or even monthly inspections. Smoke and Carbon Monoxide detectors need regular checks too! Don’t get caught outmake sure you know all the ins and outs of managing a long–term accommodation business! Seek professional advice if need be. Keeping your tenants safe, your property in good standing, and your investment secure is worth it.

Pros and Cons Owning a Long–Term Rental Knowing all the pros and cons of owning a long–term rental is essential to making the right investment decision. Here are some of the things that we have seen with some of our clients: Pros: • Steady rental income—with regular tenants, rental payments remain consistent and provide a steady source of revenue. • Security in knowing who lives on your property—when leasing long–term, you can screen applicants more thoroughly, giving you peace of mind that you know who is living on your property. • Long–term tenants often take better care of the property— with a longer lease term, you can expect tenants to try to maintain the property and become more responsible for taking care of it. Cons: • Difficult to evict tenants if needed—evicting tenants in a long-term lease can be more complex and time-consuming than those in a short-term lease. • Difficult to raise the rent—due to the longer term of the agreement, raising rent may also be more difficult because it requires an amendment to the existing contract. In BC, you can only increase a long–term lease by 2% and need to give 3 months’ notice before doing so. • Loss of flexibility and mobility—having long-term tenants means less room to switch things up or change if needed. • Higher tenant turnover costs—when a tenant leaves the property, it may take longer for you to find another suitable one and cost more money in terms of lost rental income and other expenses associated with finding a new tenant. What You Need to Know As a landlord, you must carefully weigh the pros and cons of long–term rentals. Long–term leases can benefit tenants and landlords, providing stability and security for all parties involved. But it’s important to understand the rules and regulations of managing a long–term rental property to ensure success! With a network of over 60 lenders, Green Mortgage knows which ones won’t overstay their visit on your mortgage. While some lenders might shy away from lending on short–, medium–, or long–term rentals, we know the ones that love this business model. Get this house party started by contacting us today!

AIRBNB AND VRB0

Which Platform is Better for Your Short Term Rental

WHETHER YOU’RE JUST LOOKING TO MAKE A BIT OF EXTRA MONEY, GROW YOUR RENTAL PORTFOLIO, OR DOUBLE DOWN ON YOUR PROFITS, GREEN MORTGAGE KNOWS WHAT LENDERS WILL LEND FOR THE LONG–TERM.

Airbnb and VRBO are both popular listing platforms for short–term rental (STR) properties.

Airbnb is a peer–to–peer marketplace that allows individuals to list, discover and book unique accommodations worldwide.

VRBO (Vacation Rentals by Owner), on the other hand, is an online platform for homeowners to advertise their vacation properties for rent—including apartments, houses, villas, cabins, and more—to travelers looking for short-term stays.

Both platforms offer fantastic opportunities for property owners to make money by renting out their homes or part of their homes on a short–term basis. By the end of this article, you should have a better idea about which platform to post your STR on.

Airbnb Airbnb is a unique travel platform that has revolutionized the way people rent and find lodging while traveling. It allows owners and investors to list their properties for short-term rental—from apartments and homes to cabins, treehouses, boats, and more—giving them access to a global market of travelers looking for something unique. As an Airbnb host, you can use its innovative features and technology to increase your reach, attract guests, and make money.

How to Become an Airbnb Host To become an Airbnb host, you must create a listing on the website, including details about your property, such as location, amenities offered, pricing information, etc., along with pictures so potential guests can get an idea of what they are booking. From there, you’ll be able to manage your listing, communicate with guests, and use the various tools Airbnb provides to help maximize your earnings.

Airbnb’s easy–to–use platform helps make renting a property simple and stress–free. It also has powerful marketing features such as price optimization, discounts for more extended stays, the ability to offer early check–in or late check–outs, and more —allowing hosts to maximize their profits through customized pricing strategies. Additionally, Airbnb provides an additional layer of protection for hosts by vetting all guests before they’re allowed on the platform and providing host insurance in case of any damages or issues that arise during a guest’s stay. How Much Does It Cost to List My STR on Airbnb? The costs involved in renting your property through Airbnb can vary depending on the fees and taxes required by local regulations. • Generally, hosts are subject to a 3% service fee for each reservation they accept, along with any applicable guest booking fees. • Some cities may also require hosts to pay occupancy or hotel taxes that range from 4-14%. Airbnb does provide access to accountant and tax specialist services to help you understand your obligations as a host in each location you list your property. Furthermore, it’s essential to consider other costs, such as cleaning, maintenance, and utilities, when budgeting for an Airbnb rental. To maximize earnings potential, it’s best to set competitive prices that cover all associated costs while ensuring your property remains profitable.

Overall, with the correct pricing strategies and taxes accounted for, renting out your property through Airbnb can be an intelligent way to make extra income while satisfying the needs of travelers looking for unique experiences.

What Are the Pros and Cons of Airbnb? Here are some pros and cons to consider when using Airbnb: Pros

• Reach a global network of travelers looking for unique and memorable experiences. • Easy–to–use platform with powerful marketing features. • Additional guest vetting and host protection measures in place to ensure safety. • Opportunity to make extra income off your property. Cons • Need to abide by local regulations, including occupancy taxes and fees.

• It can be time–consuming managing a rental listing, from booking inquiries to cleanings between guests. • Potential damages or issues during a guest’s stay that can diminish earning potential or require additional costs for repair/replacement.

Renting out your property on Airbnb can be a great way to earn extra income while connecting with travelers from around the world looking for unique experiences. With its user–friendly platform, comprehensive features, and marketing tools, you’ll be able to maximize your earnings in no time!

VRBO VRBO (Vacation Rental by Owner) is an online platform that lets homeowners list and manages their vacation rental properties. With VRBO, owners can take complete control of the entire renting process. From setting rates, managing bookings, and collecting payments through secure payment gateways—it can all be handled quickly via the VRBO website or app. Homeowners even have access to a 24/7 support team for any questions or concerns they may have along the way. As a bonus, you can share your rental listings on multiple channels, such as social media and travel websites, helping them reach potential guests from around the world quickly and easily. With VRBO, you don’t need to rely on traditional rental agencies or third–party brokers to manage vacation rentals. This gives you a lot more freedom and control over what you do with your property. With VRBO, owners can enjoy the benefits of running a successful rental business without any of the hassles associated with traditional methods.

VRBO Fees for Owners Although there is no listing fee associated with VRBO, you will still pay a commission on the rental amount. Here is what to expect:

• Expect a 5% commission when your property is booked, which covers the rental amount and any extra fees, such as cleaning or pet fees.

• 3% payment processing fee will be taken from the total payment you receive from your renter, including taxes and refundable damage deposits.

• Property owners can manage their fees through their VRBO dashboard so that all expenses are covered.

What Are the Pros and Cons of VRBO? Here are some of the pros and cons to consider when using VRBO: Pros: • Access multiple promotion channels, including social media and travel websites.

• Secure payment gateways for collecting payments quickly and securely.

• 24/7 customer support team to answer any questions or concerns.

• Option of taking complete control over the renting process, from setting rates to managing bookings.

• Professional property management lets you know it is well taken care of while renting out.

• Customizable listings so you can create an attractive listing that stands out from the rest.

Cons: • You may have to pay a fee to list your properties on VRBO.

• You may have to pay a commission if you hire a rental agency or third-party broker to handle bookings and other services.

• You will be responsible for handling customer service–related issues and be prepared to answer questions or concerns quickly and efficiently.

• There is no guarantee of occupancy rates or revenue, as this can vary depending on your location and the seasonality of the area.

• You may need to invest in additional promotional activities, such as advertising, to ensure that your listing reaches potential guests worldwide.

• The cost of maintaining and preparing the property for each booking can increase over time, so you must factor this into your budget.

• There is no guarantee of the quality of guests you will receive, as you rely on reviews to determine who books your property.

• You may be subject to legal and regulatory requirements depending on where your property is located.

Despite some potential downsides, VRBO provides an excellent opportunity for homeowners to take control of their vacation rental business and maximize bookings while minimizing effort. With features like secure payment gateways, 24/7 customer support, customizable listings, access to multiple channels for promotion, and professional management servicesall in an easy-to-use platform—VRBO presents an excellent option for those looking to make their dreams of owning a successful vacation rental come true.

What You Need to Know For owners VRBO comes out on top for longer stays, superior customer service, and a stronger insurance policy. While Airbnb is one of the only sites that offers shared accommodation. Single rooms and communal apartments tend to be much cheaper than renting the entire place. Airbnb is typically for short–term stays while VRBO is typically for medium—and long–term stays. With these factors taken into account, it’s up to you to decide between Airbnb and VRBO. Whether you’re just looking to make a bit of extra money, grow your rental portfolio, or double down on your profits, Green Mortgage knows what lenders will lend for the long–term.

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